In late December of 2012, one of Shell Oil’s Arctic drillships, the Kulluk, snapped its tow-line during a powerful storm in the North Pacific. After multiple failed attempts to re-establish a tow, the Coast Guard evacuated the crew of the Kulluk, rescue tugs abandoned their efforts to pull the ship to safety, and the Kulluk grounded on Sitkalidak Island near Kodiak, Alaska. The January 4 issue of the New York Times Sunday Magazine tells the dramatic story of the events that led up to the disaster in an article entitled, The Wreck of the Kulluk.

The Sunday Magazine story tells a gripping tale, especially if you like accounts of drama on the sea. Aside from being a good read, the story makes clear that Shell and its contractors easily could have avoided the disaster. Before leaving port, the tug’s tow master predicted that Kulluk’s planned route “guarantees an ass kicking.” Warnings signs don’t get much clearer than that. But the tow master’s caution, like many other warning signs—was ignored.

I wrote about Shell’s multiple mistakes and its failure to recognize risk in this blog post, which was published soon after the Coast Guard released a report on its investigation into the Kulluk incident. Another Coast Guard investigation led to the recent announcement that Shell contractor Noble Drilling would plead guilty to eight felony charges and pay more than $12 million in fines relating to violations onboard Shell’s other Arctic drillship, the Noble Discoverer.

Unfortunately, Shell wants to return to the Arctic this coming summer. The oil giant has submitted plans to bring the Noble Discoverer and another drillship to the Chukchi Sea this year. That could spell double trouble for the Arctic. Tell the Secretary of the Interior to say “no” to Shell’s risky drilling plans. Please sign our petition today.

Breaking: The U.S. government is beginning to make plans for future offshore oil and gas operations—and those plans could open Arctic waters to risky drilling.

This follows Shell Oil’s decision to abandon Arctic drilling this summer, after an accident-plagued 2012.

If a disaster like BP Deepwater Horizon happened in the Arctic, spill response would be even more challenging. The Arctic’s sea ice, freezing temperatures, gale force winds, and lack of visibility could make cleanup next to impossible.

The government’s public comment period ends on July 31, so we only have 10 days to respond. We need you to tell the Bureau of Ocean Energy Management (BOEM) to say no to risky Arctic drilling now.

The Arctic Ocean and all those who depend on it are already under stress. The rapidly changing climate, including extreme deterioration of the summer sea ice, is putting Arctic marine animals at risk. Many people who live in coastal communities in the Arctic depend on a clean and healthy ocean to support their subsistence way of life. Offshore drilling for oil and gas would expose this already fragile ecosystem to significant noise, pollution and traffic.

On Jan. 30, Shell Oil announced that it has postponed plans to drill for oil in the Chukchi Sea off the northwest coast of Alaska in 2014. Shell’s decision followed a recent court decision that threw into question the status of Shell’s offshore oil leases in the Chukchi Sea—but other factors are at play, too.

As explained in my previous blog post, a panel of the 9th U.S. Circuit Court of Appeals recently ruled that an environmental analysis associated with the 2008 Chukchi Sea lease sale was faulty. Under the court’s decision, the Bureau of Ocean Energy Management will have to revisit that environmental analysis, and then decide whether to affirm its 2008 decision to sell the offshore leases. In the wake of the court ruling, Shell’s new CEO announced that the company is “not prepared to commit further resources for drilling in Alaska in 2014.”

Certainly, the 9th Circuit’s ruling influenced Shell’s decision to cancel its plans for a 2014 Arctic drilling program. But the court decision is not the only factor that should cause Shell and other oil and gas companies to reconsider their pursuit of Arctic oil.

First, operating in the Arctic is difficult and expensive, something that is well-illustrated by Shell’s failed foray into the Arctic Ocean in 2012. After a season plagued by mishaps and accidents, Shell limped away without completing a single Arctic well. Both of Shell’s Arctic drilling rigs experienced major difficulties: The Noble Discoverer had propulsion problems and was cited by the U.S. Coast Guard for unauthorized discharges, and the drilling unit Kullukran aground near Kodiak Island during a storm in the Gulf of Alaska. Both vessels had to be dry-towed to Asia for repair. If nothing else, Shell’s experience in 2012 is a stark reminder that accessing Arctic oil won’t be easy, and it won’t come cheap. After issuing a “dreadful profit warning” early in 2014, some observers suggest that it no longer makes sense for Shell to pursue difficult and costly Arctic oil.

Second, U.S. regulators are beginning to recognize and address the special dangers and risks associated with Arctic drilling, and companies that want to drill in the Chukchi and Beaufort seas will need to meet higher standards. For example, after Shell’s ill-fated 2012 drilling season, the Department of the Interior (DOI) imposed special, heightened requirements on Shell for any future Arctic operations. DOI also announced its intent to craft new offshore drilling regulations that specifically target operations off the coast of Alaska. In addition, the U.S. Coast Guard should soon release the results of its investigation into the grounding of the Kulluk, which could trigger regulatory or policy changes related to the marine transport aspects of oil exploration in the Arctic. In short, oil companies that want to drill in the U.S. Arctic will likely have to learn—and play by—a new and tougher set of rules.

Third, oil companies still have not demonstrated that they can effectively clean up an oil spill in icy Arctic waters. It was hard enough for oil spill response organizations to cope with the 2010 BP Deepwater Horizon oil disaster in the Gulf of Mexico. In an Arctic oil spill, responders would not only have to clean up spilled oil; they may have to contend with sea ice, darkness, bitter cold, fog or hurricane-force winds, not to mention the Arctic’s lack of infrastructure and remote location (the U.S. Coast Guard station in Kodiak is more than 900 miles from the city of Barrow on Alaska’s North Slope). Although major oil spills are relatively rare, they can have catastrophic consequences for fish and wildlife, marine and coastal environments, and residents of affected coastal communities. After assessing these risks, French giant Total concluded that the risk of an oil spill in Arctic waters was too high to justify drilling.

All these factors suggest that oil companies and government regulators should reassess whether drilling in the Arctic Ocean really makes sense, both from a financial and an environmental perspective. In the meantime, there should be a timeout on offshore drilling in the Arctic. That time could be put to good use by improving our understanding of the Arctic ecosystem, protecting important ecological and subsistence areas, and developing effective methods to clean up oil spills in Arctic waters.

]]>http://blog.oceanconservancy.org/2014/01/31/shell-ceo-says-no-arctic-drilling-in-2014/feed/1Why Now is Not the Time for a New Offshore Lease Sale in the Chukchi Seahttp://blog.oceanconservancy.org/2013/10/30/why-now-is-not-the-time-for-a-new-offshore-lease-sale-in-the-chukchi-sea/
http://blog.oceanconservancy.org/2013/10/30/why-now-is-not-the-time-for-a-new-offshore-lease-sale-in-the-chukchi-sea/#commentsWed, 30 Oct 2013 18:38:22 +0000Andrew Hartsighttp://blog.oceanconservancy.org/?p=6889

Photo: Leigh Elliot / Photo Contest 2011

Just before the government shutdown brought federal agencies to a standstill at the beginning of October, the Bureau of Ocean Energy Management (BOEM) issued a “call for information” for a potential new oil and gas lease sale in the Chukchi Sea off the coast of northwest Alaska. A new Chukchi Sea lease sale would allow oil and gas companies to buy additional oil leases in one of the most remote and challenging environments on the planet. The response to the call for information is easy: now is not the time to sell new oil and gas lease sales in the Chukchi Sea.

The last oil and gas lease sale in the Chukchi Sea was in 2008. Since that time, the Deepwater Horizon oil disaster in the Gulf of Mexico reminded the world that when things go wrong, offshore drilling can have catastrophic consequences for fish and wildlife, marine and coastal environments, and residents of affected coastal communities. The Deepwater Horizon disaster also triggered new safety and environmental protection requirements for oil and gas companies that wish to drill in Arctic waters.

Two years after the Deepwater Horizon disaster, Royal Dutch Shell tried its hand at drilling in the Arctic and experienced a whole series of disasters. Among other things, a massive ice floe blocked access to one drilling site for about two weeks, the company’s drilling vessels violated their air emission permits, the drillship Discoverer suffered propulsion problems and had to be towed to port, and the drilling unit Kulluk ran aground off Kodiak Island and had to be salvaged by outside consultants. For all that, Shell failed to complete a single Arctic well.

As Shell’s 2012 drilling campaign unraveled, other oil and gas companies backed away from plans to drill in the Arctic Ocean. Statoil and ConocoPhillips in particular both announced that they would not consider drilling in the Chukchi Sea until 2015 at the earliest. Shell itself is still not sure when it will make another attempt to drill. In fact, its outgoing CEO recently acknowledged that Shell could abandon its Arctic leases if they prove too risky and expensive.

Shell’s 2012 drilling season also forced government regulators to acknowledge that the existing safeguards are not sufficient. Earlier this year, the Department of the Interior (DOI) issued a special report that identified significant shortcomings in Shell’s Arctic drilling effort and imposed new requirements on Shell. DOI also recognized the need for new, region-specific rules to govern offshore drilling off the coast of Alaska. The agency is working to prepare those rules, but they will not be finalized for many months. The U.S. Coast Guard has launched a formal marine casualty investigation related to the grounding of the drillship Kulluk. Findings of that investigation could trigger regulatory or policy changes related to the marine transport aspects of oil exploration in the Arctic.

Both the oil and gas companies and federal regulators are still trying to determine whether and how to proceed in the wake of the Deepwater Horizon disaster and Shell’s failure-plagued Arctic campaign. Given the great uncertainty surrounding oil and gas operations in the Arctic Ocean at this time, there is simply no reason for BOEM to hold a new oil and gas lease sale in the Chukchi Sea.

Instead of trying to sell new offshore leases in a remote and risky offshore environment, BOEM should concentrate its resources on improving the rules that govern offshore drilling in Arctic waters. If BOEM continues to consider a new Chukchi Sea lease sale in 2016, it should use this “call for information” as an opportunity to identify and exclude from the lease sale areas that are especially important for Arctic wildlife and subsistence users. Join us in telling the Bureau of Ocean Energy Management to call a halt to this potentially damaging act.

What a difference a year makes. Last year at this time, Shell Oil had a fleet of vessels in the Arctic Ocean in an attempt to drill for oil off the north and northwest coasts of Alaska. But Shell’s 2012 season was plagued by mishaps and mistakes, from the near-grounding of the drillship Noble Discoverer last July to the all-too-real grounding of the drilling unit Kulluk on New Year’s Day this year.

In the end, Shell failed to complete a single Arctic well, and both the Noble Discoverer and Kulluk were so badly damaged that they were towed to Asia for repair earlier this year. In fact, the EPA just fined Shell $1.1 million for unauthorized levels of air pollution from the two vessels — yet another reminder that Shell was not prepared for its Arctic operations.

Shell’s disastrous 2012 season caused oil companies to retreat from proposed offshore drilling plans in the U.S. Arctic. Shell abandoned its plan to drill wells in the Arctic Ocean this year, and ConocoPhillips and Statoil announced they won’t attempt to drill their leases in the Chukchi Sea until at least 2015. This summer, the Arctic Ocean got a reprieve.

Make no mistake, though: this is a temporary reprieve. Shell has made clear that it is still committed to drilling in the Arctic, and ConocoPhillips and Statoil have not given up on their Arctic oil leases either. As I’ve written before, the threat of drilling in Arctic waters is still very much alive.

Even so, this temporarily provides an important opportunity to advocate a better, more thoughtful approach to decision-making in the Arctic. That’s why Ocean Conservancy has been pushing for meaningful changes to the way that federal agencies plan for and manage oil and gas operations in the Arctic. Fortunately, we’re starting to see some progress.

For example, the Department of Interior has announced its intent to improve federal regulations that govern offshore oil and gas operations in the Arctic. We’ve long advocated this kind of reform, since existing regulations don’t reflect the special challenges presented by drilling in Arctic conditions. So far, the Interior Department is considering regulations relating to specific issues like containment systems, relief well capability, and mutual assistance and resource sharing in Arctic waters. Those changes would be a good first step, but the Interior Department also needs to undertake more comprehensive regulatory reform to ensure risks and benefits are weighed properly at the beginning of the planning process.

In addition, the Obama administration released a new National Strategy for the Arctic Region that crystallizes some important concepts. Among those, it calls for protection of the Arctic environment and conservation of Arctic resources, and it recognizes the need for scientific research and traditional knowledge to improve our understanding of the Arctic region. Moreover, the strategy endorses a more coordinated approach to Arctic decision-making called Integrated Arctic Management.

As my colleague Stan Senner noted in an earlier blog post, the piecemeal approach to decision-making that has been used in the Arctic so far has made it difficult to assess the cumulative impacts of multiple development decisions. Integrated Arctic Management is a different approach that should help to identify environmentally sensitive areas at the outset to help ensure they are protected, monitored and managed appropriately.

The Department of Interior’s new regulations and the Obama administration’s new National Strategy for the Arctic Region show promise, but they are still in early stages. Real change will come when the Interior Department finalizes comprehensive regulatory reform, and when the words and goals articulated in the National Strategy are realized in concrete conservation actions. We’re making progress, but we still have a long way to go.

Help us put Arctic drilling plans on ice until oil companies prove they can clean up an oil spill in severe Arctic conditions. Sign the petition today.

The Interior Department’s new high-level, 60-day review – while not comprehensive – calls attention to serious shortcomings in Shell’s 2012 effort and recommends a more thorough, integrated approach to planning and oversight before deciding on whether to approve future Arctic drilling operations.

The review confirms what we already knew: that Shell simply was not ready to conduct safe and responsible operations in icy Arctic waters. It also demonstrates that federal agencies need to do a better job holding the oil industry accountable and setting higher standards for safety and environmental protection.

To that end, Shell will be required to submit a “comprehensive, integrated plan” covering all aspects of drilling and related operations, and “commission and complete a full third-party audit” of its management systems.

The company’s drilling program was plagued by problems throughout the season. Its performance has been notable only for its failures, and has provided us with a laundry list of reasons for why industry is not ready for offshore oil exploration in the Arctic.

The Interior Department initiated its urgent review of Shell’s actions in the Arctic in light of the recent grounding of the Kulluk drilling rig off the coast of Sitkalidak Island in the Gulf of Alaska. The company’s other Arctic drillship—the Noble Discoverer—suffered significant problems with propulsion, safety and pollution prevention systems. As a result, Shell now plans to dry-tow both vessels to Asia for repair and renovation. This latest setback prompted the troubled oil company to announce that it would hit pause on its plans to drill in the Arctic during the 2013 season.

While Shell’s admission of defeat this year reduces the short-term threat of Arctic drilling, it only makes the findings of the Interior Department’s review that much more important in the long run. Shell may have halted its drilling operations for now, but it plans to bring its drill rigs back to the Arctic soon. Furthermore, ConocoPhillips recently declared that it is not backing off on its plan to drill exploratory wells in the Arctic in 2014.

Without meaningful action from the Interior Department and other government agencies, Arctic drilling could lead to a disaster for the region. As the 60-day review put it, a “significant accident or spill in the remote and inhospitable Alaskan Arctic could have catastrophic consequences on fragile ecosystems and the people who depend on the ocean for subsistence.”

The Interior Department’s review is a first step on the road to implementing stronger, safer and more protective oversight of Arctic waters. Now, government agencies need to follow through on the report’s recommendations and make meaningful changes to the way they plan for and manage Arctic oil and gas operations.

In the meantime, there should be a complete time-out on Arctic drilling until we have improved our understanding of the Arctic ecosystem, protected important ecological and subsistence areas and developed effective methods to clean up an oil spill in icy Arctic water. Thankfully, Shell’s decision to pass on the 2013 drilling season gives us time to make progress.

Today, after months of speculation and countless questions regarding their Arctic drilling operations, and on International Polar Bear Day, Shell announced that it would suspend its attempts at further oil exploration in the Arctic for 2013. Given Shell’s performance over the past year, their decision to pause drilling for 2013 is one of the smartest moves they’ve made regarding Arctic operations. Shell has clearly demonstrated that the company is not prepared to conduct safe and responsible operations in icy Arctic waters. We need a time-out on Arctic drilling until we have improved our understanding of the Arctic ecosystem, protected important ecological and subsistence areas and developed effective methods to clean up an oil spill in icy Arctic water

This announcement came after a long season of other mishaps and missteps, followed by continuing troubles in Alaska throughout the winter. Shell’s Kulluk drilling unit ran aground near Kodiak Island in December after Shell lost control of the vessel while attempting to tow it in stormy seas. At roughly the same time, sources in the media reported that Shell’s other Arctic drillship, the Noble Discoverer, suffered a series of significant problems with propulsion, safety and pollution prevention systems.

Two weeks ago, Shell announced that it would tow both of its beleaguered Arctic drilling units to Asia for repair. As Shell prepared to tow the Kulluk, the tugboats assigned to the task wound up crashing into each other.

Shell’s failures during 2012 season demonstrate clearly that the company is not prepared to conduct safe and responsible operations in icy Arctic waters. Secretary of the Interior Ken Salazar initiated a high-level review of Shell’s operations and activities in 2012. We’re urging that the review be transparent, objective, and comprehensive. An honest assessment of Shell’s failures and missteps will show that Shell wasn’t ready for the challenge of operating in the Arctic. And it will also show that the federal regulators who gave Shell the green light need to hold Arctic operators to a much higher standard.

The Department of the Interior plans to release its review in early March. In the meantime, let’s not allow Shell—or any other oil and gas company—to gamble with the health of the Arctic Ocean.